Export Promotion

<<–2/”>a >p style=”font-weight: 400;”>Export Promotion

Government of India has liberalized the schemes for export oriented units and export processing Zones. agriculture, Horticulture-2/”>Horticulture, Poultry, Fisheries-2/”>Fisheries and dairies have been included in the export oriented units. Export processing zones have been allowed to export through trading and star trading houses and can have equipment on lease. These units have been allowed cent percent participation in foreign equities.

Export Promotion Schemes

Foreign Trade Policy 2015-20 and other schemes provide promotional measures to boost India’s exports with the objective to offset infrastructural inefficiencies and associated costs involved to provide exporters a level playing field. Brief of these measures are as under:

Exports from India Scheme
Merchandise Exports from India Scheme (MEIS)

Under this scheme, exports of notified goods/ products to notified markets as listed in Appendix 3B of Handbook of Procedures, are granted freely transferable duty credit scrips on realized FOB value of exports in free Foreign Exchange at specified rate (2-5%). Such duty credit scrips can be used for payment of custom duties for import of inputs or goods, payment of excise duty on domestic procurement, payment of service tax and payment of custom duties in case of EO default.

Exports of notified goods of FOB value upto Rs 25, 000 per consignment, through courier or foreign post office using E-Commerce shall be entitled for MEIS benefit.

Service Exports from India Scheme (SEIS)

Service providers of notified Services as per Appendix 3E are eligible for freely transferable duty credit scrip @ 5% of net foreign exchange earned.

Export Houses, trading houses and star trading houses:

To increase the marketable efficiency of exporters, the government introduced the concept of export houses, trading house and star trading houses. Those registered exporters who have shown good performance over the past few years have been given the status of export houses and trading houses.

Since 1994n a new category of golden super star trading house was added by the government which has the highest Average annual foreign exchange earnings.

Duty Exemption & Remission Schemes

These schemes enable duty free import of inputs for export production with export obligation. This scheme consists of:-

Advance Authorization Scheme

Under this scheme, duty free import of inputs are allowed, that are physically incorporated in the export product (after making normal allowance for wastage) with minimum 15% value addition. Advance Authorization (AA) is issued for inputs in relation to resultant products as per SION or on the basis of self declaration, as per procedures of FTP. AA normally have a validity period of 12 months for the purpose of making imports and a period of 18 months for fulfillment of Export Obligation (EO) from the date of issue. AA is issued either to a manufacturer exporter or merchant exporter tied to a supporting manufacturer(s).

Advance Authorization for annual requirement

Exporters having past export performance (in at least preceding two financial years) shall be entitled for Advance Authorization for Annual requirement. This shall only be issued for items having SION.

iii. Duty Free Import Authorization (DFIA) Scheme

DFIA is issued to allow duty free import of inputs, with a minimum value addition requirement of 20%. DFIA shall be exempted only from the payment of basic customs duty. DFIA shall be issued on post export basis for products for which SION has been notified. Separate schemes exist for gems and jewellery sector for which FTP may be referred.

iv.Duty Drawback of Customs/Central Excise Duties/Service Tax

The scheme is administered by Department of Revenue. Under this scheme products made out of duty paid inputs are first exported and thereafter refund of duty is claimed in two ways:

i) All Industry Rates : As per Schedule
ii) Brand Rate : As per application on the basis of data/documents

v.Rebate of Service tax through all industry rates

Refund of service tax paid on specified output services used for export of goods is available at specified all industry rates.

Export promotion Capital Goods (EPCG) Scheme
Zero duty EPCG scheme

Under this scheme import of capital goods at zero Custom Duty is allowed for producing quality goods and services to enhance India’s export competitiveness. Import under EPCG shall be subject to export obligation equivalent to six times of duty saved in six years. Scheme also allows indigenous sourcing of capital goods with 25% less export obligation.

Post Export EPCG Duty Credit Scrip Scheme

A Post Export EPCG Duty Credit Scrip Scheme shall be available for exporters who intend to import capital goods on full payment of applicable duty in cash.

EOU/EHTP/STP & BTP Schemes

Units undertaking to export their entire production of goods and services may be set up under this scheme for import/ procurement domestically without payment of duties. For details of the scheme and benefits available therein FTP may be required.

Other Schemes
Towns of Export Excellence (TEE)

Selected towns producing goods of Rs. 750 crores or more are notified as TEE on potential for Growth in exports and provide financial assistance under MAI Scheme to recognized Associations.

Rebate of duty on “export goods” and “material” used in manufacture of such goods

Rebate of duty paid on excisable goods exported or duty paid on the material used in manufacture of such export goods may be claimed under Rule of 18 of Central Excise Rules, 2002.

iii. Export of goods under Bond i.e. without payment of excise duty

Rule 19 of Central Excise Rules 2002 provides clearance of excisable goods for exports without payment of central excise duty from the approved factory, warehouse and other premises.

Market Access Initiative (MAI) Scheme

Under the Scheme, financial assistance is provided for export promotion activities on focus country, focus product basis to EPCs, Industry & Trade Associations, etc. The activities are like market studies/surveys, setting up showroom/warehouse, participation in international trade fairs, publicity campaigns, brand promotion, reimbursement of registration charges for pharmaceuticals, testing charges for engineering products abroad, etc. Details of the Scheme is available at www.commerce.nic.in

Marketing Development Assistance (MDA) Scheme

Financial assistance is available for exporters having an annual export turnover upto Rs. 30 crores for trade fairs, buyer seller meets organized by EPC’s/ Trade promotion organizations. MDA guidelines available at www.commerce.nic.in

Status Holder Scheme

Upon achieving prescribed export performance, status recognition as one star Export House, two Star Export House, three star export house, four star export house and five star export house is accorded to the eligible applicants as per their export performance. Such Status Holders are eligible for various non-fiscal privileges as prescribed in the Foreign Trade Policy.

In addition to the above schemes, facilities like 24X7 customs clearance, single window in customs, self assessment of customs duty, prior filing facility of shipping bills etc are available to facilitate exports.

Import substitution

Import substitution is an aggressive economic policy employed by emerging economies to promote domestic production and self-sufficiency in many sector. It is also seen as a means to reduce dependency on developed nations. IS seeks to provide added protection to domestic industries via tariffs, import quotas, government loans at subsidized rates of interest. This encourages people to start new production units. The boost to domestic manufacturing sector leads to EMPLOYMENT opportunities being created and considerably lowers the demand for foreign exchange. The economies adopt this policy to protect its budding industry from international competition that has easily attained economies of scale due to large-scale production.

Import substitution gained widespread prominence and adopted by many countries after World War II to bolster domestic industry and growth. This was also done to reduce dependence on other countries. India too had resorted to import substitution which was later reversed during 1991 currency crisis. Indian Industry could not be expanded to its full potential due to severe lack of sophisticated basic Infrastructure-2/”>INFRASTRUCTURE.

Import substitution although can prove beneficial for certain sectors of economy for some specific phases in economic conditions but if the policy is stretched over the entire Industrial Sector as a long term policy can eventually lead to less competitive production which will gradually start to decline. Thus the output will also dip and so will the job creation avenues as the incentive to produce more will fade due to absence of global competition. It is thus, different from the theory of comparative advantage in which countries engage in production of specialized goods and then enter global markets to bravely fight international competition.

The phenomenon has again gained limelight due to ‘Make in India’ campaign being promoted by the Government of India. The idea is to make India a favored Investment destination and attain a considerable level of output from 16% to 25% by 2022. It has been cautioned that India’s ‘Make in India’ campaign should not be seen as the strategy for import substitution as that will lead to reduction in domestic competition, production inefficient and thereby leading increase in commodity prices. Such increased prices shrink demand for products. Thus, over protectionism can lead to dynamic inefficiency as domestic players replace foreign producers. This often leads to poor allocation of Resources as there is no incentive for domestic producers for innovation. There is a fine line between the two phenomena and the government has to carefully walk the talk.

Export promotion is the process of helping businesses to sell their goods and services in foreign markets. It can be done by governments, trade associations, or individual businesses.

There are many different ways to promote exports. Some common methods include:

Export promotion agencies: These are government agencies that provide support to exporters, such as market research, financial assistance, and training.
Export promotion strategies: These are plans that outline the goals and objectives of a country’s export promotion efforts.
Export promotion programs: These are specific projects that are designed to help businesses export, such as trade fairs and exhibitions.
Export promotion policies: These are laws and regulations that are designed to encourage exports, such as tax breaks and subsidies.
Export promotion schemes: These are financial incentives that are offered to businesses that export, such as grants and loans.
Export promotion incentives: These are non-financial incentives that are offered to businesses that export, such as marketing assistance and training.
Export promotion financing: This is the provision of financial assistance to businesses that export, such as loans and grants.
Export promotion marketing: This is the process of promoting goods and services in foreign markets.
Export promotion Logistics: This is the process of getting goods and services from the exporter to the buyer.
Export promotion Communication-technology/”>Information and communication technology (ICT): This is the use of ICT to promote exports, such as e-commerce and online marketing.
Export promotion training and Education: This is the provision of training and education to businesses that export.
Export promotion research and development (R&D): This is the research and development of new products and services for export markets.
Export promotion advocacy and networking: This is the process of promoting the interests of exporters and building relationships with other stakeholders.
Export promotion coordination and cooperation: This is the process of coordinating and cooperating with other government agencies, trade associations, and businesses to promote exports.
Export promotion evaluation and impact assessment: This is the process of evaluating the effectiveness of export promotion efforts.

Export promotion can be a very effective way to help businesses grow and create jobs. It can also help to improve a country’s Balance of Trade and boost economic growth.

However, export promotion is not without its challenges. One challenge is that it can be difficult to identify and target potential markets. Another challenge is that it can be expensive to promote exports. Finally, it can be difficult to measure the impact of export promotion efforts.

Despite these challenges, export promotion can be a very effective way to help businesses grow and create jobs. It is important to carefully consider the challenges and opportunities before embarking on an export promotion effort.

Here are some examples of successful export promotion programs:

The German Export Promotion Agency (GTZ): The GTZ is a government agency that provides support to German businesses that export. The GTZ offers a range of services, including market research, financial assistance, and training.
The UK Trade and Investment (UKTI): UKTI is a government agency that provides support to British businesses that export. UKTI offers a range of services, including market research, financial assistance, and training.
The Export-Import Bank of the United States (Ex-Im Bank): Ex-Im Bank is a government agency that provides financial assistance to US businesses that export. Ex-Im Bank offers a range of services, including loans, guarantees, and insurance.

These are just a few examples of successful export promotion programs. There are many other successful programs around the world.

If you are considering exporting your products or services, it is important to research the export promotion programs that are available to you. These programs can provide you with the support you need to succeed in international markets.

What is export promotion?

Export promotion is the process of encouraging and assisting businesses to export their goods and services. It can be done through a variety of measures, such as providing financial assistance, marketing support, and training.

What are the benefits of export promotion?

Export promotion can help businesses to:

Increase sales and profits
Access new markets
Create jobs
Strengthen their competitive position

What are the challenges of export promotion?

Export promotion can be challenging for businesses, as it requires them to:

Understand the export market
Comply with foreign regulations
Manage logistics and shipping
Deal with foreign exchange risk

What are some examples of export promotion programs?

Some examples of export promotion programs include:

The Export-Import Bank of the United States (EXIM Bank) provides financial assistance to US businesses that are exporting goods and services.
The US Department of Commerce’s International Trade Administration (ITA) provides marketing support and training to US businesses that are exporting.
The Small Business Administration (SBA) offers a variety of programs to help small businesses export, including financial assistance, counseling, and training.

What are some resources for businesses that are interested in exporting?

There are a number of resources available to businesses that are interested in exporting, including:

The US Department of Commerce’s International Trade Administration (ITA) website provides information on export markets, trade regulations, and export financing.
The US Small Business Administration (SBA) website provides information on export financing, counseling, and training.
The Export-Import Bank of the United States (EXIM Bank) website provides information on export financing.
The National Association of Export Companies (NAEC) website provides information on export promotion programs and resources.

What are some tips for businesses that are new to exporting?

Some tips for businesses that are new to exporting include:

Do your research. Before you start exporting, it’s important to understand the export market, including the potential customers, the competition, and the regulations.
Choose the right products or services to export. Not all products or services are suitable for export. When choosing products or services to export, consider the following factors: the demand for the product or service in the target market, the competition, the cost of production, and the logistics of shipping.
Find a reliable partner. If you’re not familiar with the export market, it’s a good idea to find a reliable partner who can help you with the exporting process. This could be a freight forwarder, a customs broker, or an export management company.
Get the right documentation. When exporting, you’ll need to get the right documentation, such as export licenses, certificates of origin, and invoices.
Manage your finances. Exporting can be a complex process, and it’s important to manage your finances carefully. This includes tracking your expenses, keeping accurate records, and invoicing your customers on time.
Be patient. It takes time to build up a successful export business. Don’t expect to see results overnight. Be patient and persistent, and you’ll eventually see success.

Which of the following is not a type of export promotion?
(A) Market research
(B) Trade fairs
(C) Export financing
(D) Export insurance
Which of the following is the most common type of export promotion?
(A) Market research
(B) Trade fairs
(C) Export financing
(D) Export insurance
Which of the following is the goal of export promotion?
(A) To increase the number of countries that a company exports to
(B) To increase the value of a company’s exports
(C) To increase the number of products that a company exports
(D) To increase the number of customers that a company exports to
Which of the following is a benefit of export promotion?
(A) It can help companies to increase their sales and profits.
(B) It can help companies to diversify their markets.
(C) It can help companies to reduce their costs.
(D) All of the above.
Which of the following is a challenge of export promotion?
(A) It can be difficult to find new markets for a company’s products.
(B) It can be difficult to compete with foreign companies.
(C) It can be difficult to obtain financing for export activities.
(D) All of the above.
Which of the following is a government agency that provides export promotion services?
(A) The Export-Import Bank of the United States
(B) The Small Business Administration
(C) The Department of Commerce
(D) All of the above.
Which of the following is a non-profit organization that provides export promotion services?
(A) The U.S. Chamber of Commerce
(B) The National Association of Manufacturers
(C) The American International Chamber of Commerce
(D) All of the above.
Which of the following is a type of export promotion service that is provided by the Export-Import Bank of the United States?
(A) Export financing
(B) Export insurance
(C) Export credit guarantees
(D) All of the above.
Which of the following is a type of export promotion service that is provided by the Small Business Administration?
(A) Export counseling
(B) Export training
(C) Export financing
(D) All of the above.
Which of the following is a type of export promotion service that is provided by the Department of Commerce?
(A) Market research
(B) Trade fairs
(C) Export counseling
(D) All of the above.